4.3 Goods not in GDP (Shortcomings of GDP measure)

The sales of used goods are not included because they were produced in a previous year and are part of that year’s GDP. The entire underground economy of services paid “under the table,” and illegal sales should be counted, but not because tracking these sales is impossible. Statistics Canada estimates underground economic activity for 2021 totalled $68.5 billion in Canada, or about 2.7% of gross domestic product.

Also, the production of some goods — such as when you make your breakfast or mow your lawn—is not counted because these goods are not sold in the marketplace. To add to this, environmental pollution caused by production processes and leisure are not counted in GDP, even though the latter two are parts of people’s “well-being,” in addition to the incomes they earn. Therefore, the estimated value of GDP is an underrepresentation of the actual production in an economy in a given time period.